A move to limit repayments on small amount credit contracts to ten per cent of income would end up costing borrowers more and exacerbate financial exclusion, a lenders' lobby claims.The National Credit Providers Association, which represents small amount lenders, has attacked a key recommendation of the Review of Small Amount Credit Contract Laws that SACC repayments must not exceed ten per cent of the borrower's net income. The current rule applies only to Centrelink recipients and sets the cap at 20 per cent."This recommendation fails to understand the pricing structure and related cost impact on consumers," the NCPA said in a submission in response to the review.According to the NCPA's figures, the average repayment on an SACC is about 16 per cent of net income in the case of borrowers receiving government income and 35 per cent for employed borrowers."If adopted, a lower cap would have a significant impact on employed borrowers. The amount of the credit would be reduced or the term of the loan lengthened," the NCPA said."By limiting repayment amounts, the loans will be longer than they need to be and the cost of monthly fees will increase."Under the review proposal borrowers would not be allowed to repay their loans early if it meant they exceeded the cap.The NCPA said it supported measures to protect consumers reliant on government income but argued that no case was made in the review that the current 20 per cent repayment cap causes a debt spiral or financial exclusion. "No market failure was identified nor any figures to show that the 20 per cent cap was detrimental," the NCPA said."Bringing the repayment cap down to ten per cent would close most small to medium SACC providers, limiting access to credit for many consumers who rely on shop front outlets."